Homeowners across England have been issued a stark warning that family properties worth £1.5 million could be drawn into Chancellor Rachel Reeves' new 'mansion tax', despite the official threshold being set at £2 million.
Valuation Office to Cast Wider Net
The alert came directly from the head of the Valuation Office Agency (VOA), Jonathan Russell, during a Treasury Committee hearing on Tuesday. He revealed that his agency would likely examine homes with an 'indicative value' of £1.5 million and upwards to ensure none that should be liable for the high-value surcharge are missed.
Mr Russell explained that while the new levy officially applies to properties valued above £2 million from April 2028, the VOA's preparatory work would involve a broader sweep. 'We'll probably look at houses that have an indicative value of £1.5 million just to make sure we're not missing anything,' he told MPs.
Details of the New Surcharge
The policy, announced in the Chancellor's November Budget, introduces a council tax surcharge on homes in England valued over £2 million. This annual charge is separate from and in addition to existing council tax bills.
The surcharge operates across four price bands:
- £2,500 per year for properties worth more than £2 million.
- A rising scale for higher values.
- £7,500 per year for properties valued at over £5 million.
Mr Russell estimated that between 150,000 to 200,000 properties would ultimately fall within the scheme's scope. The VOA will focus its valuation efforts on homes between the £1.5 million and £5 million marks to ensure accurate banding.
Regional Impact and Unanswered Questions
Homeowners in London and the South East are expected to be hardest hit, as these regions contain the highest concentration of properties meeting the value criteria. The charge has been widely dubbed a 'mansion tax' by critics and commentators.
Significant questions about the policy's application remain unresolved. Mr Russell could not confirm whether specific property types, such as retirement homes or convents, would be exempt. 'That's still to be worked through,' he stated.
The valuation process itself will follow standard VOA procedures, examining property attributes like location, size, number of bedrooms, and type (detached, semi-detached, etc.).
Political Reaction and Criticism
The revelation prompted immediate criticism from the Conservative opposition. Sir James Cleverly, the Shadow Housing Secretary, accused Labour of expanding the tax's reach. 'Exactly as we predicted, Labour's new family homes tax is expanding in scope to encompass more and more homes,' he said.
'Before long, ordinary families will wake up to find their homes classed as 'mansions', and they have been slapped with a massive bill,' Sir James added. He also claimed that under Labour, council tax is 'soaring across the board'.
The government's move signifies a major shift in property taxation, with the Treasury seeking additional revenue from high-value residential assets. Homeowners in the affected value brackets are now advised to monitor official VOA communications closely as the 2028 implementation date approaches.
